If a meeting of the Board could not be held for want of quorum

Board Meetings on Public Holidays. Under Section 288 (1) of the Companies Act, 1956, adjourned Board meeting cannot be held on a public holiday. The sub-section (1) of Section 288 reads:

“If a meeting of the Board could not be held for want of quorum, then unless the Articles otherwise,provide, the meeting shall automatically stand adjourned till the same day in the next week, at the same time and place or if that day is a public holiday, till the next succeeding day which is not a public holiday at the same time and place.”

Can an Original Board Meeting be held on a public holiday? Section 288(1) disallows holding of an adjourned meeting of the Board of Directors on a public holiday. There is no other Section either on the subject. The Department of Company Affairs has, however, clarified that Section 288(1) does not prohibit a company from holding its original Board meetings on public holidays unless its Articles provide otherwise [Taxmann’s Circulars & Clarifications, 1992 edn., p. 294].

Place of Board’s Meetings. Section 301(5) provides, inter alias, that the Register of contracts in which Directors are interested shall be kept at the registered office of the company. Again, sub-section (2) requires the Register to be placed before the meeting of the Board. Accordingly, if a Board meeting is held at a place other than the registered office, it will involve removal of the Register of contracts outside the registered office and thus result in violation of the provisions of Section 301(5).

The Department of Company Affairs has, however, clarified that it would be sufficient compliance with the provisions of Section 301(5) if the company gives adequate notice to its shareholders, either once for all or from time to time indicating the precise periods during business hours and the days on which they may inspect the register kept under Section 301 (2) at the registered office. In view of the Government’s clarification, it is clear that it is legally possible to hold Board meetings at any place if the requisite notice to shareholders has been given.

Quorum. According to Section 287, the quorum for a meeting of the Board of Directors shall be 1/3^rd of its total strength (any fraction contained in that 1/3^rd to be rounded off to one) or two Directors, whichever is higher.